How to Make Money with ETFs

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ETFs Guide for Canadian Investors: Find the best way to invest in ETFs with low fees, low risk & high satisfaction.

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Topic: ETFs

ETF Stocks: Precious Metal ETFs to Buy

precious metal etfs to buy

Precious metal ETFs have largely centred on gold stocks. We continue to see the outlook for that precious metal as positive, and for aggressive investors who want to hold precious metal ETFs, including a silver ETF, we have two of them below.

More recently, gold has risen on easing inflation and strong expectations any cut in interest rates will also cut demand for the U.S. dollar as a safe harbour.  As a result, gold is now benefiting from its traditional role as a safe harbour for investors.

How to Make Money with ETFs

Learn everything you need to know in 'The ETF Investor's Handbook' for FREE from The Successful Investor.

ETFs Guide for Canadian Investors: Find the best way to invest in ETFs with low fees, low risk & high satisfaction.

 I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

We also expect gold- and silver-loving markets in Asia to continue their post-pandemic rebound. That should spur gold and silver purchases, taking precious-metal stocks even higher.

We think top gold and silver stocks have much more growth to offer savvy investors. The following ETFs let you tap that growth through top-quality global miners. We see both funds as buys.

ISHARES S&P/TSX GLOBAL GOLD INDEX ETF, is a buy for aggressive investors. The fund (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index; it’s made up of 51 gold stocks from Canada and around the world. The ETF began trading on March 23, 2001. It charges investors an acceptable 0.61% MER.

The fund’s top holdings include Newmont, 17.8%; Barrick Gold, 13.0%; Agnico Eagle Mines, 12.3%; Franco-Nevada Corp., 10.4%; Wheaton Precious Metals, 9.3%; Gold Fields Ltd., 5.7%; AngloGold, 3.9%; and Royal Gold, 3.4%.

The ETF cuts risk for investors by focusing on politically stable mining jurisdictions: Canadian firms comprise 63.4% of the fund’s assets, followed by the U.S. (21.7%) and South Africa (11.3%).

ETFs: Here’s what silver investors should consider buying

GLOBAL X SILVER MINERS ETF, is a buy for aggressive investors. The fund (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.

Set up in April 2010, the ETF gives you exposure to 32 international firms that mine, refine or explore for silver.

The fund has 65.6% of its assets in Canada. That’s ahead of the U.S. (9.7%), the U.K. (6.8%), Peru (6.5%), South Korea (5.6%) and Mexico (4.9%). Investors in the ETF face an acceptable MER of 0.65%.

The quality of the fund’s top holdings should drive your future gains: Wheaton Precious Metals represents 22.8% of total assets; Pan American Silver, 12.9%; Buenaventura, 9.4%; Korea Zinc, 7.9%; Industrias Penoles, 5.6%; Hecla Mining, 4.1%; First Majestic, 4.1%; and Fresnillo plc, 3.6%.

Recommendation in Canadian Wealth Advisor: iShares S&P/TSX Global Gold Index and Global X Silver Miners ETF are buys.

For our view on how to make the best selection in individual gold stocks, read 9 ways to spot the best gold stocks with the lowest risk.

For a recent report on how to judge whether an ETF is right for you, read When an ETF investment is the right choice.

How attractive are precious metal ETFs as an investment compared to individual gold or silver stocks?

This post was originally published in 2014 and is updated regularly.

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